
The dollar index (DXY00) Tuesday rose by +0.14%. Tuesday’s weakness in stocks boosted the liquidity demand for the dollar. Also, short covering in the dollar ahead of Wednesday’s U.S. August consumer price report lifted the dollar.
EUR/USD (^EURUSD) Tuesday fell by -0.18%. Strength in the dollar on Tuesday weighed on the euro. Also, uncertainty that the ECB will raise interest rates on Thursday is undercutting the euro as the markets are discounting the odds at only 52% that the ECB will raise interest rates by 25 bp at Thursday’s policy meeting.